Brazil: Chinese steel giant Baosteel gives up on plans for joint steel plant with Vale

21 January 2009

Rio de Janeiro, Brazil, 21 Jan – Brazilian mining company Vale said Friday that China’s Boasteel had given up on the project to build an integrated steel plate production plant in Anchieta, in the Brazilian state of Espírito Santo, originally to be called Companhia Siderúrgica de Vitória (CSV).

The Brazilian mining company noted that the changes brought on by the international economic crisis had led to reduced global production of steel, which made Baosteel propose that the investment plan be cancelled.

The project for production of 5 million tonnes of steel plates for export was budgeted to cost US$5 billion. The companies negotiated a partnership with the National Bank of Social and Economic Development, but the bank did not fund the project.

As well as setting up the new steel plant, the project included construction of a port and a railway line.

The government of Minas Gerais expected that 15,000 jobs would be created during the construction phase. According to Vale the factory would have 3,000 direct employees producing the steel plates when it was in operation.

The investment would have been the entry of China’s biggest steel maker in Brazil and negotiations had involved Brazilian President Luiz Inácio Lula da Silva himself. (macauhub)